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Chinese company building Kenyan rail link

By Hou Liqiang in Nairobi, Kenya | chinadaily.com.cn | Updated: 2015-12-08 00:23

China Communications Construction Co (CCCC) announced that the company will build a standard gauge railway across the whole of Kenya to Malaba, where Kenya meets Uganda, and will also invest in an industrial park at the starting point of Mombasa.

While securing the financing for the first phase of Nairobi-Malaba Standard Gauge Railway from Nairobi to Naivasha, which will cost $1.48 billion, the company also said it won the contract for the second and third phases, which are separated by Kenya's western city Kisumu; the plans were announced during the Forum on China-Africa Cooperation held in Johannesburg. It's about 450 kilometers from Nairobi to Malaba.

Currently, CCCC's subsidiary China Road and Bridge Corp is building the 472-kilometer Mombasa-Nairobi Standard Gauge Railway, which will be completed in 2017 at a cost of $3.8 billion.

Liu Qitao, chairman the Fortune Global 500 firm, told China Daily during the summit that the company had projects worth a total of more than $5 billion and have secured loans for them during the summit. Meanwhile, the company is in the process of applying for a loan of a further $5 billion for other projects and "there is no big problem for that".

He also said the company plans to build a number of industrial parks in Africa. One of them will be in Mombasa. He said it's a project the company self-invests in and it will cover an area of 12 square kilometers. "We will invest in it gradually and the investment in the first phase is about $1 billion."

The announcement was made after President Xi Jinping announced assistance and loans totaling $60 billion for Africa to help the continent address its top three difficulties: infrastructure, talent and funding.

The 10 proposed cooperation plans cover industrialization, agricultural modernization, infrastructure, and poverty reduction and people-to-people exchanges.

"These plans aim at addressing three bottleneck issues holding back Africa's development, namely inadequate infrastructure, lack of professional and skilled personnel and a funding shortage," Xi said.

Among the 10 plans that were announced, Xi put the China-Africa industrialization plan first, saying that China will boost industrial links and collaboration on production capacity.

"China will build or upgrade a number of industrial parks in cooperation with Africa and send senior government experts and advisers to Africa," he said.

As a company that has been in Africa for more than four decades, CCCC knows Africa better than many other Chinese companies and "we are everywhere in Africa. Before, we mainly constructed infrastructure, but now we will move upward to do 'high-end' industries, "said Liu.

"I believe we could play a big role in Africa's industrialization process as we have the capability. No matter whether we are promoting urbanization, building industry parks or investing and financing, we have strong capability," Liu said.

Liu also said his company will make full use of its experience to help companies from mainland of China to come to Africa.

"We will support the development of local enterprises as well and help them take part in long-term urbanization process in Africa," he said.

The standard gauge railway from Mombasa to Malaba is believed to be significant in reducing transportation costs, creating job opportunities and promoting the industrialization process in the whole East Africa region.

Currently, shipping a 6-meter container about 13,000 km from China to Mombasa costs about $1,700. Shipping it the extra 500 km or so to Nairobi can add about $1,000 to that.

The single-gauge railway is expected to reduce rail transport costs from $20 cents to 8 cents per metric ton per kilometer. It will also relieve the pressure on traffic on the highway, notable for the discarded oil containers due to accidents, and reduce the great damage from the trucks to the road.

In the Mombasa to Nairobi section, up to 30,000 workers are expected to be employed before it is completed and 5,000 Kenyan workers will be trained, according to CRBC.

Kenya government has planned a number of industry parks along the Mombasa-Nairobi Standard Gauge Railway.

Contact the writer at houliqiang@chinadaily.com.cn

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